List your expected expenses to calculate your Total Project Cost and your required cash down payment.
Usually 6 months of operating expenses.
Note: 10% is the SBA minimum. Depending on your industry and risk profile, many banks may overlay their own rules and require a 15% to 20% equity injection.
The Startup Costs Calculator is an essential planning tool for entrepreneurs launching a new business or acquiring an existing one. It helps you aggregate all your day-one expenses and determines exactly how much cash you need to bring to the closing table.
You itemize your projected expenses, including equipment, inventory, working capital, and franchise fees. The calculator aggregates these into a "Total Project Cost." It then applies the SBA's strict equity injection rules to calculate your minimum required cash down payment (typically 10% to 20%) and the maximum SBA loan you are eligible to request.
An "equity injection" is the SBA's term for a down payment. The SBA explicitly requires borrowers to have "skin in the game" to mitigate risk. Cash is always acceptable, but in some cases, you can also inject equipment, inventory, or real estate that you already own outright if it is essential to the new business.
By official SBA regulation, any true startup (a business operating for less than 2 years) or any change of ownership (buying an existing business) requires an absolute minimum equity injection of 10% of total project costs. However, many conservative banks will demand 15% to 20% depending on the borrower's personal credit strength and industry experience.
You can bundle almost every conceivable startup expense into your SBA loan request. Eligible costs include:
Banks want to ensure you don't run out of cash the day after you open. Therefore, they will analyze your post-close liquidity. They typically require you to hold enough cash in reserve (outside of the loan) to cover several months of personal living expenses and unexpected business shortfalls.